Buying under a power of sale

When the housing market shifts, whether from loss of value or from increased interest rates, an unfortunate consequence is often an increase in properties that are sold under power of sale, or sold by the mortgage lender in order to pay back the mortgage. This consequence can be an opportunity for the right buyer, but you should keep in mind that the person selling to you hasn’t been living there. They don’t know anything about the physical nature of the house, so they completely limit their liability for anything that could go wrong. This will be written right into the offer, so if something happens after closing, you will be out of luck. Do your due diligence up front. Get a home inspection, and get in inspectors for any specialized items on the property (well, septic system, wood stove or fireplace, fuel oil tank, etc.).

Buying under power of sale can give you a financial break. Be sure it doesn’t become a money pit.

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Deborah Wall-Armstrong established her office in 1977 as a full-service law firm. Over the years, Deborah focused her practice into real estate, estate planning and administration and incorporations. Cesia Green joined the firm in 2008, and in 2011 she and Deborah entered into partnership as … Read More